The Engines of Diversification: Interpreting the Sectoral Strategies of Saudi Arabia’s Project 2030

When looking to the future, many thoughts come to mind for each person. For Saudi Crown Prince and Prime Minister Mohammad bin Salman, that future features hundred-mile cities, ski resorts, and even an oil-rig-centered theme park. However, while these features may seem daunting at first, they complement the country’s aim towards a distinct future. 

In an era of reforming policy models, Saudi Arabia’s Project 2030, comprising 14 giga-projects and hundreds of individual projects across the sectors of tourism, logistics, technology, finance, etc., is one of the most ambitious yet innovative mega-projects, aiming to enhance the nation’s global trade and diversify its economic markets. 

A New Genesis: Saudi Arabia’s Vision 2030

It was April 25th, 2016, when a special announcement was made on Al Arabiya News from the King Abdullah Petroleum Studies and Research Center (KAPSARC) in the Saudi capital of Riyadh.  In the coming moments, former Deputy Crown Prince Mohammad bin Salaman revealed a striking narrative through an interview, stating that the government had a “vision” and “road map for objectives over the next fifteen years,” to develop the economy to eager Saudi listeners that day.

Nonetheless, this broadcast announcement on the Saudi news was not going to be a temporary thought in civilians’ minds. Still, it would serve as a declaration towards a new future for the desert-ridden nation.  But what had consisted of this news, and what was its significant intention? In a matter of hours, all Saudi citizens, from the country’s northernmost edges in Tabuk, and southernmost reaches of Abha, would discuss the new ideas and information, for Saudi Arabia’s Vision 2030 was announced. 

While foreigners may have been unaware of the meaning of such a proposal, costing over 1.3 trillion U.S dollars across countless decades according to Bloomberg and Arab News sources, the proposal, consisting of thousands of new developments in infrastructure, policy, and investment, had a clear exigence: oil.

In the years leading up to the announcement of Vision 2030, economists could come to recognize Saudi Arabia’s particularly distinct profit model. While exact statistics vary, the region’s exponential reliance on oil—supported by its status as the world’s largest oil exporter—was a glaring weak point. Notably, studies conducted by the International Monetary Fund recorded that in 2011, Saudi Arabia’s oil industry accounted for 93% of its budget revenue, and the World Bank revealed that across the 2010s, oil had accounted for over 80% of government revenue.

“We will not allow our country to ever be at the mercy of commodity price volatility or external markets,” stated Saudi officials in the additional announcements. This unwanted scenario was manifested in 2015, when a price drop in crude oil led to a roughly 100 billion deficit in revenue.

Thus, starting instantaneously, Crown Prince and Chairman of CEDA Mohammad bin Salman, and his father, King Salaman bin Abdullaz, began appointing new ministers who would serve as critical facilitators for Vision 2030.  The first of many strategies was the National Transformation Program (NTP), which was approved and initiated in June 2016 and now comprises over 178 strategic objectives and 543 individual initiatives. It was meant to serve as an accelerator for the efficiency of the nation itself in five years' time to ensure that future strategies could be implemented and developed properly.

Firstly, one of the initial concerns derived from technology. In 2015, only 30% of the government judicial services were accessible online, and it took over fifteen days to legally register and establish a business. There, the kingdom aimed to foster digitization through its expansion of fiber-optic infrastructure to increase national digital connection, connecting more than 3.5 million Saudi homes by the end of the five years.

Furthermore, systems such as Etimad, Absher, and the Najiz Platform transferred government and judicial services online in Saudi Arabia. Secondly, to further prepare the market for the eventual reforms, the kingdom aimed to foster the rise of new business ventures through platforms such as the Saudi Business Center, which aimed to ensure entirely online licensing and registration through a portal system. 

Lastly, the kingdom aimed to activate one of its untapped resources: women. They initiated policies that removed or reduced earlier obstacles for women intending to pursue the workforce, such as the inability to drive or obtain a passport, in addition to financial subsidies and amendments to labor laws. These initiatives supported the Saudi objective to increase the female labor participation rate to thirty percent from seventeen percent, and in 2025, that rate currently lies around thirty-six percent. 

Soon enough, the kingdom would rank 62nd in the World Bank’s Ease of Doing Business Index in 2020, an increase from its rank of 94th in 2016. Additionally, they ranked as third in the world for protecting minority investors.

Chasing Diversification: The Economics of the NIDLP and the Reforms Towards Logistics & Energy Hubs

Firstly, given the nation’s history of reliance on crude oil exports, it's understandable that there are vast goals to expand. One of the most significant domains of reform is Project 2030’s National Industrial Development and Logistics Program (NIDLP), which, according to Saudi Minister of Investment Khalid bin Abdulaziz Al-Falih, has been classified as “one of the most important programs” for the project. In order to reduce the reliance on oil, certain protocols within this program were enacted, directly combating the statistics that show 90% of monetary gain from exports revolves around oil. 

For instance, a substantial domain in this field is logistics. By 2025, the country aimed to reach an index score of 3.38 out of 5 in the World Bank’s Logistics Performance Index, which measures the success and efficiency of trade and supply chain infrastructure. With such goals in mind, the nation aimed to utilize its significant geography in the Arabian Peninsula, serving as an “epicenter of trade” and “gateway to the world” through new infrastructure projects collaborated on by the Private-Public Partnerships (PPPs). 

Specifically, these Private-Public Partnerships, consisting of government agencies collaborating with private businesses and investors, aim to resolve the nation’s background of primarily state-controlled services and infrastructure by providing capital and operational efficiency. Some examples of their impacts include the privatization of over 25 airports in addition to the creation of three new airports: NEOM Bay Airport, Red Sea International Airport, and, most notably, King Salman International Airport in Riyadh. The King Salman International Airport, which will be an updated version of the current King Khalid International Airport, will complement the Riyadh special economic zone and expand the nation’s influence in the aviation industry. 

Moreover, the Riyadh Integrated Special Logistics Zone (RISLZ), which was established in late 2022,  will aim to engage foreign businesses through the nation’s upcoming model, consisting of full foreign ownership, zero corporate tax, and flexible labor laws. In light of Project 2030, the zone aims to have a strategic location, connecting directly to the future King Salman International Airport.  

Moreover, Project 2030 aims to transform the nation into a logistics hub through greater road, rail, and port infrastructure, utilizing its National Transport and Logistics Strategy (NTLS); the NTLS seeks to reinforce trade efficiency and interconnection in the country, aiming to create roughly sixty logistics centers that will serve in e-commerce automation, manufacturing systems, and cargo handling. These actions will ultimately support the Gulf Cooperation Council—the economic and political unit consisting of Saudi Arabia, Oman, Kuwait, United Arab Emirates (UAE), Bahrain, and Qatar—through greater connectivity.

However, the kingdom’s aim for reform includes not only emphasizing the utilization of the private sector, but also encouraging the growth of an additional domain: energy.  During the initial launch of Project 2030, the kingdom announced its focus on the growth of new energy sources. In order to further diversify the Saudi economy, the kingdom aims to incorporate its mining sector as a catalyst for revenue and GDP, specifically aiming to reach a goal of 103 billion U.S dollars by 2030 to ensure that mining will become the “third pillar” of the nation’s industry. 

In progress towards this goal, the nation has implemented directives, including a reduced tax rate for mining projects. Sources such as the Saudi Ministry of Industry and Mineral Resources claim that this rate has been cut from forty-five percent to twenty percent in recent years to boost investor confidence in Saudi mining, which consists of the excavation of over forty metals. 

But how will the nation ensure the efficiency of production logistics? Essentially, one of the various factors includes the Ta’adeen Platform to digitize mining licensing processes and further encourage investment through improved order. An additional tool that has also supported this goal is the Exploration Enablement Program (EEP), which was established in 2024 to fuel industry collaboration. Notably, the kingdom will aim to provide incentives to private sector mining groups that qualify, specifically emphasizing groups that will aim to innovate the sector and explore new mineral regions, and hold proper activity licenses. To stimulate Saudi mining activity on an international scale, the kingdom established Manara Minerals. Its goal is to invest in global mining activity and strengthen the Kingdom’s supply chain of mineral resources for its domestic industries.

One of the final pillars of the kingdom’s approach to economic growth includes its ambitious proposals for sustainable energy development. Firstly, the strategy itself includes the development of a definitive energy hub, the King Salman Energy Park (SPARK) complex. While the complex itself is planned to serve traditional energy sectors, such as oil, in addition to clean energy sources, it is a manifestation of the project’s objective to localize oil ventures in accordance with the In Kingdom Total Value Add (IKTVA) program goals. The location of the complex is near the port city of Dammam and is situated adjacent to Bahrain and Qatar in the Eastern Province of the kingdom. According to official documentation, SPARK is planned to contribute 6 billion U.S dollars to the GDP annually and provide over 100,000 jobs.

Many of these efforts will further complement the activities of the Saudi Green Initiative, which began in 2021 to plant 10 billion trees and combat climate change, and foster a green economy. Likewise, the initiative aims to foster greater hydrogen energy strategy and developments in wind and solar energy.

The Tourism Trend: The Development of Infrastructure Mega-Projects for Foreign Economic Engagement

Lastly, Project 2030 aims to ameliorate the country’s tourism industry, expanding on the emphasis on empowering the private sector, and has been critically relevant to the development of Project 2030’s goals. Specifically, in an interview with The National News in 2021, Crown Prince Mohammad bin Salman had stated, “one of the cornerstones of Vision 2030 is increasing tourism revenue and attracting a global audience to places of outstanding natural beauty and heritage value in the kingdom.” Furthermore, in accordance with the plans to diversify the Saudi economy, the kingdom set a goal of having 10% of the GDP derived from tourism.

But to achieve the kingdom’s lofty goal of 150 million tourists annually, what will be manifested? In accordance with the efforts of the kingdom, there appears to be a conclusive answer: mega-projects. On October 24th, 2017, Salman formally announced NEOM at the inaugural Future Investment Initiative (FII) conference. While the event’s aspirations were primarily centered on demonstrating the country's aspirations to investors and future partners through agreements and Memoranda of Understanding (MoUs) for Public Investment Fund (PIF) infrastructure, the announcement of NEOM and its ambitions would provide additional angles to the Kingdom’s aim of economic reform. 

Firstly, the project consists of roughly ten primary individual tourism, infrastructure, and environmental initiatives, all funded by the Private Investment Fund.  Moreover, the NEOM consists of four major sub-developments: the infamous THE LINE project with its aim to house nine million people across 170 kilometers by 2045; Oxagon, the previously recorded project aiming to capitalize trade through the creation of a port city;  Trojena, a future tourism destination located in mountainous northwest Saudi Arabia; and Qiddya, an additional world-class entertainment hub with its own Esports center, Formula One Track, waterpark, and Six Flags theme park. 

To support this, the kingdom has developed the Tourism Pioneers Program, which includes the mass-training of over one hundred thousand Saudi men and women to serve in tourism industries, and in the financial domain, has developed the Tourism Development Fund, which aims to provide financial support through incentives for the private sector projects in tourism. 

Furthermore, the kingdom aims to present NEOM in a unique light through its distinct diplomatic entities. Explicitly, NEOM is planned to have an autonomous judicial system composed of laws intended for global practices and interests, and in light of finances, NEOM is anticipated to include a zero percent withholding tax and zero percent corporate tax for up to twenty years, in addition to allowing one hundred percent foreign ownership in sectors to foster the growth of a special economic zone. Lastly, in an effort to open the country towards more foreign audiences, the tourist e-visa policy was established in 2019 to encourage travel through the improved efficiency of visa systems. 

Recently, Project 2030’s initiative on tourism has had ambivalent results. In 2024, the first of many tourism-centered infrastructure projects, Sindalah, was completed and began welcoming private guests. Further, the Red Sea Project, designed to comprise fifty hotels, had opened some hotels to the public in 2023, such as its Six Senses Southern Dunes, The Red Sea, and Nunjuma, a Ritz-Carlton Reserve. Alongside these developments, the residential village, the Turtle Bay Village, and Red Sea International Airport also opened in 2023, signifying the region’s progress in developing adequate tourism centers. 

Additionally, Trojena has recently made agreements with Marriott International to host a Ritz-Carlton Reserve property in addition to the JW Marriott and W Hotel that were announced for the location, and in terms of foreign relations, the location was selected in 2022 to host the 2029 Asian Winter Games, further demonstrating the support and momentum of Project 2030’s tourism model. 

Lastly, and most significantly, the country’s progress, and notably, surpassment of its tourism goals, further cement the nation’s rise to international relevance in the tourism industry. In 2023, the country’s 11.5 percent of annual GDP was derived from tourism, which, in comparison to the mere 3 percent in 2019, illustrates the crucial and developing impacts of these projects and efforts, which, as a result, are supporting the nation’s aim to reduce oil reliance. Secondly, the tourism growth further stimulated the expansion of private sector industries, such as hospitality and construction, by over 4.7%. In the workforce sector, over 2.6 million jobs in tourism were generated by 2023, surpassing the goal of 1.6 million by 2030. 

Bibliography

Alsweilem, Khalid A. "A Stable and Efficient Fiscal Framework for Saudi Arabia: The Role of Sovereign Funds in Decoupling Spending from Oil Revenue and Creating a Permanent Source of Income." Belfer Center for Science and International Affairs and Center for International Development, Harvard Kennedy School, Apr. 2015, projects.iq.harvard.edu/files/sovereignwealth/files/saudi_framework_final.pdf.

Burke, Christine, and Fahad Abuljadayel. "Saudi Arabia's Vision 2030 Projects Reach $1.3 Trillion in Value." Bloomberg, 9 Sept. 2024, www.bloomberg.com/news/articles/2024-09-10/saudi-arabia-s-vision-2030-projects-reach-1-3-trillion-in-value.

"Full Transcript of Prince Mohammed bin Salman's Al Arabiya interview." Alarabiya English, 25 Apr. 2016, english.alarabiya.net/media/inside-the-newsroom/2016/04/25/Full-Transcript-of-Prince-Mohammed-bin-Salman-s-Al-Arabiya-interview.

"The National Transport and Logistics Strategy." Ministry of Transport and Logistic Services Kingdom of Saudi Arabia, mot.gov.sa/en/ntls.

"Our Identity." King Salman Energy Park, www.spark.sa/page/Our_Identity.

"Our Investment Mandate." Manara Minerals, 2023, www.manaraminerals.com/Investments.html.

"Overview." Saudi Arabia Project 2030, www.vision2030.gov.sa/en/overview.

"Saudi Arabia's tourism sector contributing record sums to GDP: WTTC report." Arab News, 10 June 2024, www.arabnews.com/node/2527561/amp.

"Saudi Arabia's Vision 2030: Early Signs of Success." Saudi Press Agency, 25 Apr. 2024, www.spa.gov.sa/en/N2089591.

"Saudi Arabia Economy Profile: Doing Business 2020." Doing Business, World Bank, 2020, openknowledge.worldbank.org/server/api/core/bitstreams/373981f1-f5e4-57fb-b78a-d7b81ab39410/content.

"Saudi Arabia: 2011 Article IV Consultation—Staff Report; Public Information Notice on the Executive Board Discussion." International Monetary Fund, Sept. 2011, www.imf.org/external/pubs/ft/scr/2011/cr11292.pdf.

"Strategy for the Mining Sector." Vision 2030 Saudi Arabia, Kingdom of Saudi Arabia, www.vision2030.gov.sa/en/explore/strategies/strategy-for-the-mining-sector.

"Vision 2030." Vision 2030, Kingdom of Saudi Arabia, www.saudiembassy.net/sites/default/files/u66/Saudi_Vision2030_EN.pdf.